May 21, 2024

GWS5000

Make Every Business

What the election means for investors

This infographic shows how financial markets have performed under Democratic and Republican presidents, and during election years in general. The market’s performance has been roughly the same under Democratic and Republican presidents. Over the 95 years they held office between 1860 and 2019, the annualized compound growth rate under Republicans was 8.3{79e59ee6e2f5cf570628ed7ac4055bef3419265de010b59461d891d43fac5627}. For the 65 years Democrats held the White House, it averaged out to 8.4{79e59ee6e2f5cf570628ed7ac4055bef3419265de010b59461d891d43fac5627}. Experts believe this statistically insignificant difference offers little to no value when it comes to your investing strategy. Month-to-month market performance during election years hasn’t followed any distinctive patterns—the numbers are very close to random. Stock volatility tends to be lower in the months before and after a presidential election. From 1860 through 2019, the average S&P 500 Index volatility 100 days before and 100 days after elections was 13.8{79e59ee6e2f5cf570628ed7ac4055bef3419265de010b59461d891d43fac5627}, compared with 15.7{79e59ee6e2f5cf570628ed7ac4055bef3419265de010b59461d891d43fac5627} overall. Markets are complex, and their performance isn’t tied to any one variable alone. Politics are just one piece of a much bigger picture. Above all, stay focused on your own goals and long-term investing strategies. That’s what matters most.

Learn extra about why patience and standpoint are so critical when you spend. Aims and comply with-through are huge elements of just about every prolonged-time period approach. And bear in mind: we’re all in this together.

* 60{79e59ee6e2f5cf570628ed7ac4055bef3419265de010b59461d891d43fac5627} GFD US-100 Index and 40{79e59ee6e2f5cf570628ed7ac4055bef3419265de010b59461d891d43fac5627} GFD US Bond Index, as calculated by historical data service provider International Money Information. The GFD US-100 Index incorporates the leading fifty corporations from 1850 to 1900, and the leading 100 corporations by capitalization from 1900 to the existing. In January of every yr the premier corporations in the United States are ranked by capitalization, and the premier corporations are chosen to be portion of the index for that yr. The next yr, a new checklist is created and it is chain-connected to the former year’s index. The index is capitalization-weighted, and each price tag and return indices are calculated. The GFD US Bond Index works by using the U.S. government bond closest to a ten-yr maturity without having exceeding ten a long time from 1786 until eventually 1941 and the Federal Reserve’s ten-yr frequent maturity yield commencing in 1941. Each month, variations in the price tag of the fundamental bond are calculated to figure out any money attain or loss. The index assumes a laddered portfolio which pays fascination on a regular basis. All returns suppose dividends/fascination coupons are reinvested into their respective indexes. Regular returns are geometric signify

**Vanguard calculations of Regular & Poor’s five hundred Index returns in election a long time, primarily based on data from Thomson Reuters.

Notes:
All investing is issue to threat, which include the doable loss of the dollars you spend.

Past performance is no assure of foreseeable future returns. The performance of an index is not an actual illustration of any individual investment, as you are unable to spend directly in an index.